Gift cards first timers: expectations and pitfalls

[bandoraone]

We just opened our first brick-n-mortar (in addition to two food trucks) and the whole focus on bringing new customers to the store and awarness building. Want to consider gift cards with some promotional spin.

What has been your experience with GC as a means to drive new customers? What worked for you and what you regret about doing or not doing? What is the value you put on the cards? Eager to learn your stories.

[EJ_]

Awesome post!

Hopefully you get some good insight from your fellow sellers.

Here's an article on the Gift Card FAQ's in case you had a few questions.

[bandoraone]

Are the gift cards accepted in all locations?

Changing the topic but a similar question: can the loyalty program be across the locations?

[Kelly]

Yep! If you have multiple locations on your Square Accounts, your gift cards can be used across all of your locations. 

As for your loyalty, if you have upgraded to our new Loyalty program, you can select which locations you would like your loyalty program can be used at. It's all up to you! 

[Ron]

We use Square Gift Cards we had printed with our company logo on them and we love having them. Much better than the paper gift certificates we used in the past. Customers love Gift Cards, they buy them for their kids, for gifts for special occasions and especially at holiday time. One perk for you as the owner, many gift cards are never redeemed, you collected the money but never have to redeem them. I say start as soon as you can and display them at your checkout area so customers know you have them.

[GoodGrapes]

Gift cards work ok for us. While they drive some new businesses, they aren't hitting it out of the park. Having said that, it's an essential for my wine store and much better than the paper gift certificates we previously used. One thing that doesn't work well is loading a gift card for donation. Square requires that transaction be completed or the loaded amount doesn't stay on the card (e.g., "faking" that money has been collected and it subsequently showing up as revenue). As a small business in a small community, businesses are expected to be part ofthe community and being part of the community means donating to fund raisers.  In order to give a gift card I have to create a 100% discount, add the amount to the card, add the 100% discount to the transaction, select Charge, and confirm that I want to complete a $0 transaction. While this might not sound like a big effort, I'm about to do this for 150 - $5 dollar gift cards that I'm donating to goody bags of a local charity. This is a HUGE time consumer. I haven't yet tried the eGiftCards. While the initial expense of gift cards are a higher than paper gift certificates, the costly part (the physical card) comes back to you and is re-usable. You just need to purchase more gift envelopes. Lastly, my customers purchasing the gift card expect the Loyalty points, which Square gives to the gift card recipient upon use of the card. I agree with my customers that they should get the Loyalty points.

[GoodGrapes]

One more thing ... If you use cards via Square's provided as I did, you set the gift card amount when a transaction is made.  If you want to have cards with preset amounts, I believe that you would need to the 100% discount approach and then add the loaded Gift Cards as a item / product available for purchase. Someone from Square can confirm / negate.

[pessosices]

We do the same strategy - 100% discount.

We simplified the process for us by setting up a default amount for whatever amount we want to give to the particular fundraiser, so it takes out some steps, just tap swipe, tap swipe, and then apply the 100% discount at the end of the transaction.

If it's a default amount that we don't want to use again, we just delete it when we're done.

As for the loyalty points, we actually like that they only get the points when the items are redeemed - otherwise they would get stars twice, once when they buy the card, and then when they redeem them on an item, which can easily be taken advantage of and end up costing the business.

[GoodGrapes]

Thanks for the tip on setting up the default amount.

In terms of the Loyalty points, I don't support them being allocated twice. That would be similar to the software defect of applying the same points multiple times when the bill is split. I do, however, agree with my customers that the person purchasing the card should receive the loyalty points.

[pessosices]

We used to do paper gift certificates, and since our items are pretty low cost, we had our gift certificates low cost - also made it easier to keep track of them.
Once we switched to Square Gift Cards, we've been able to up the Values of our Gift Cards tremendously - from $3 to $25-50 which has been a huge boost to our sales.

Another thing we do to use our Gift Cards to boost business has been to donate some to local community events - fundraisers, raffles, schools events - that brings in a bunch of new customers, both the winners as well as other people who attended the event and hear our name, and the fact that we donate.

Some pitfalls are the higher cost of plastic cards over just printing our own, but we really do sell so much more plastic gift cards over our own paper certificates. Also, if they're cleaned and taken care of, we do end up reusing a portion of the returned ones so we save some money there.

We definitely recommend.